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Is PCTEL, Inc. (NASDAQ:PCTI) Excessively Paying Its CEO?

Simply Wall St
·3 mins read

David Neumann became the CEO of PCTEL, Inc. (NASDAQ:PCTI) in 2017. First, this article will compare CEO compensation with compensation at similar sized companies. Then we'll look at a snap shot of the business growth. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.

See our latest analysis for PCTEL

How Does David Neumann's Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that PCTEL, Inc. has a market cap of US$166m, and reported total annual CEO compensation of US$678k for the year to December 2018. While this analysis focuses on total compensation, it's worth noting the salary is lower, valued at US$363k. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of US$100m to US$400m. The median total CEO compensation was US$1.1m.

Most shareholders would consider it a positive that David Neumann takes less total compensation than the CEOs of most similar size companies, leaving more for shareholders. However, before we heap on the praise, we should delve deeper to understand business performance.

You can see, below, how CEO compensation at PCTEL has changed over time.

NasdaqGS:PCTI CEO Compensation, January 31st 2020
NasdaqGS:PCTI CEO Compensation, January 31st 2020

Is PCTEL, Inc. Growing?

PCTEL, Inc. has increased its earnings per share (EPS) by an average of 4.8% a year, over the last three years (using a line of best fit). It achieved revenue growth of 4.6% over the last year.

I'd prefer higher revenue growth, but the modest improvement in EPS is good. So there are some positives here, but not enough to earn high praise. Shareholders might be interested in this free visualization of analyst forecasts.

Has PCTEL, Inc. Been A Good Investment?

Most shareholders would probably be pleased with PCTEL, Inc. for providing a total return of 68% over three years. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

It looks like PCTEL, Inc. pays its CEO less than similar sized companies.

David Neumann receives relatively low remuneration compared to similar sized companies. And the returns to shareholders were great, over the last few years. So, while it might be nice to have better EPS growth, on our analysis the CEO compensation is quite modest. Shareholders may want to check for free if PCTEL insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.